What You Don’t Know About Doing Business In Hong Kong

Interesting facts and finer points of doing business, and living, in the magnificent world city of Hong Kong.

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Hong Kong is vibrant and resilient. Since 1997, when it returned to being a Special Administrative Region of the People’s Republic of China, it has sailed through global economic crises thanks to its key drivers of economic growth, which in the case of Hong Kong are retail, logistics and business services, financial services, real estate development (boosted by public infrastructure works), and tourism. The UK government –and the Wall St. Journal– has designated it the world’s freest economy for 20 consecutive years and it is ranked as the world’s eighth largest trading economy and a leading financial and business centre for Asia.

It is also important to point out that it has a significant degree of autonomy from China and has its own legal system currency and customs jurisdiction; the only area in which it must follow China’s ruling is in foreign affairs and defence.

Another key to its success is the business access it provides to mainland China and to other parts of Asia. Add to this the fact that Hong Kong is a free port that does not levy any customs tariff and has limited excise duties and you have an environment that businesses love. It may be a relatively small territory with a total population of just over seven million, but there are at least 1,362 subsidiaries of American companies based here, and that is just the USA. In the last two years some firms have started bypassing Hong Kong and setting up subsidiaries on the Chinese mainland, however, they have discovered that they face higher costs and longer delays than if they’d established a Hong Kong intermediary.

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5 reasons you should set up a business in Hong Kong

In my experience as an entrepreneur working around the world I strongly recommend doing business in HK and here are my five reasons for doing so:

 

  • China welcomes foreign entrepreneurs and business owners to develop their businesses in Hong Kong and provides them with the tools to grow successfully with little stress in the registry process of the business. The same can’t be said of many other countries.
  • The infrastructure facilities in Hong Kong are what make the city so well-known worldwide. Hong Kong’s air and sea transport facilities provide an excellent service for all customers, so all shipping, logistics and freight forwarding services are first rate. It is perfectly located for reaching other parts of Asia and has excellent telecommunications – a vital element for modern businesses.
  • Hong Kong has some of the lowest tax rates in the world and a simple tax system. Low taxes are a great incentive for businesses.
  • The legal system in Hong Kong tends to favour the business community and it is a transparent and fair system.
  • It is one of the world’s most liberal economic systems due to its free trade policy, no trade barriers and no limit for foreign onshore and offshore investments. Capital just keeps flowing here

 

A fantastic lifestyle

And, on top of a superb business environment, Hong Kong is a fantastic place to live. Its efficiency is on show from the moment you land at its international airport and find yourself in the centre of the city in about 25 minutes. It’s a ‘work hard, play hard’ city, with the same trendy areas that you’ll find in New York or London and you can enjoy weekend breaks in Shanghai, Beijing, Singapore or Thailand. It buzzes with a young, entrepreneurial spirit and it attracts an eclectic mix of fascinating individuals.

If you’re checking out Hong Kong as a place to set up your business, I’d recommend taking the Star Ferry from Kowloon to Hong Kong Island to get a feel for the place. And, lunch on the IFC Terrace will give you a memorable view of The Peak and the harbour. As for restaurants and bars; Hong Kong has everything from fine dining to some of the best street food in Asia.

There are few downsides I can think of to doing business in Hong Kong and there are few places in the world that I’d put in the same class as this place, because it’s a city that just loves business like an entrepreneur.

I hope you enjoyed this and found it useful. Please subscribe to my blog if you’d like to receive an alert when I post new content.

 

 

London – a home for entrepreneurs and entertainment

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London is the world’s leading financial centre and has been for some time. A 2017 global study by Z/Yen of the world’s finance cities shows that London still holds the top spot despite the uncertainty about the future after the ‘Brexit’ vote to leave the European Union. In response to the findings of the report, which placed New York, Singapore, Hong Kong and Tokyo behind London in the top five places, London’s deputy mayor explained why the city continues to dominate the financial world: “No other city can provide its unique environment for business success: access to the best talent from around the world, an abundance of high-quality office, co-working, start-up spaces, excellent connectivity, and an entrepreneurial and innovative environment.”

For me, his description captures the essence of London and why it attracts people from all over the world to work there. It has been able to recruit and retain the best global talent and there is a key historic reason regarding that.

Why London became a leader in finance

London got in early at the birth of modern capital markets and English Common Law was the first to impose regulations on the dangerous practice of fractional reserve banking. At the same time, the City of London boys were always looking at innovation in finance. The establishment of the Bank of England in 1694 turned the City into a financial centre and it is the place where modern banking was born, even if we have to go back a few hundred years. The development of Britain’s Empire helped it to gain great wealth and its aggressive traders and money men created an environment unmatched in other places.

Now London also has Canary Wharf annexed to the City and its financial businesses have continued to benefit from being located between America and Asia. Plus, its language is English, which is the international language of business, it has excellent centres of education and it’s in “a country with a high level of technological innovation and well-developed infrastructure, being in a country with a recent history/tradition of liberal economics and being in a country where the Law is strong and corruption, though ever present, doesn’t entangle business with too much risk and uncertainty,” says City analyst and writer Richard Guy.

There are also three good reasons that London will maintain its status after the UK leaves the EU. These are, says Simeon Djankov at Biznews:

  1. The pre-eminence of the British court system in upholding the rule of law, including the protection of creditor and shareholder rights.
  2. The superiority of the UK’s university education in economics and finance over its continental counterparts.
  3. The UK’s tax and employment regulation that is conducive to the industry’s health and profits.

London’s culture nurtures entrepreneurs

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I would add a fourth reason: London is extremely conducive to nurturing the entrepreneurial spirit; there is a vibe in London that anything is possible and people flock here to make their dreams happen. This is all supported by the rich culture of London: you can attend the Royal Opera House and on the way home drop into the currently fashionable ‘speakeasy’ bars opening up around Hoxton and Shoreditch, a hub of modern art and high tech start-ups. It has its West End theatres with world-class shows on the doorstep of Chinatown and Soho’s piano bars, some of which date back to the 50s when jazz became popular. Most of all, it has a kind of cosmopolitan mix that seems to spur people on to make what might seem impossible elsewhere happen. And, London has always welcomed this attitude and celebrated it, and I feel confident it will continue to deliver both a top-class service to finance and business, as well as make a major contribution to global culture.

 

 

 

 

Tips on startup cash

Tips on startup cash

As an entrepreneur I am well aware that managing your cash flow in the early days of a business startup can be challenging. Not everyone has the comfort of a generous investor who provides a safety net, and those that don’t have sufficient liquidity need to take a ‘bootstrapping’ approach. This has saved many a new business from failing before it has barely begun and in my opinion, if you can rescue your business by yourself, you will be better prepared for what lies ahead. Therefore, I have put together 8 tips about the various ways in which you can bootstrap your business.

  1. Generate cash quickly

A business model that has the potential to generate cash rapidly is most likely to succeed if you’re bootstrapping and relying on your own finances. Not all business models will do this, so from the outset look at how you can bring cash in from the start.

  1. Watch your expenditure

Open a business bank account at the first opportunity. Using your personal bank account is risky because it is harder to keep track of incoming funds and outgoings. Discipline yourself to watch where cash goes and what demands more of it and when. There are free tools available that track spending and you should be monitoring your expenditure on a daily basis.

  1. Reduce personal spending

This is just common sense. You may have your own business but that doesn’t mean you can immediately start living the high life. You don’t have a salary as such, so think very hard about every purchase and only buy what is absolutely necessary. If possible, look at other ways to save money, such as reducing your rent by sharing with a friend.

  1. Do the job yourself

It would be lovely to outsource some tasks, but this is both an unnecessary expense and one that stops you from learning more about your business.

  1. Learn a new skill

This is related to the previous tip – if you don’t know how to perform a task that is required by your business, learn it rather than ask somebody else to do it. If you need to write code but have never done it before, now is the time to acquire the skill. You’ll save money and have a new skill.

  1. Learn the art of thrift

Apart from reducing personal spending, look at ways to reduce business expenditure. Make good use of all the freebies available, such as free versions of Dropbox and other online tools. Do you really need an office or can you work from home? Choose the latter first until you actually need to pay for premises.

  1. Invest in your website and business incorporation

This is one exception to the being thrifty tip. Make sure you use a respected incorporation service, because in the long term a shoddy service may come back to haunt you. Also, buy the web domain you want from Day One and build your brand around it from the start. It won’t cost less if you wait and you’ll miss the opportunity to establish your branding.

  1. Refuse to take ‘No’ for an answer

You might find that when you are small some suppliers don’t want to work with you. It’s essential that you build a personal relationship with these people, because by doing so you are more likely to get the service at a price you can afford. Tell them your story and what you are trying to achieve – appealing to people’s emotions is all part and parcel of running a business.

I can tell you that none of this is a walk in the park as they say, but if you follow these tips, the pay-off is considerable and you’re more likely to find you have a solid, long-term business.

I hope you enjoyed this and found it useful. Please subscribe to my blog if you’d like to receive an alert when I post new content.

 

 

 

Being Human at Work

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When our oldest child entered middle school we found it necessary to meet with his principal. At that time of course, school was his full-time job — and there were developing signs that it was the wrong job. As parents, we felt the need to discuss a strategy to address the job-person fit. To be frank, the over-riding goal was not to boost his grades, but to protect him as a developing individual.

As things stood, his role was clearly a frustrating exercise. Sadly, he was showing signs of complete exhaustion. One very astute teacher put it this way: “He actually has 7 bosses and they all want something a little different. That’s not an easy task.” I couldn’t have put it better. He was drowning in the midst of the demands he faced. None of this emphasized his strengths — only his clear weaknesses in the executive functioning realm.

Our son brought himself to his role as student. But more importantly, he was a human being that was faced with the learning environment as it was presented. We held no judgements as to what was “right” or “wrong” about that environment — only that his experience with that environment was both unique and challenging.

What we asked of his principal was quite simple: 1.) That he had an opportunity to explore/discover something that brought him feelings of competence and 2.) that he still loved (or at the very least, respected) the process of learning when he left her care. She was the needed glue to help him to sift through the noise and find the signals.

Being human at work poses a related challenge.

When you ponder your work life, what immediately comes to mind? Do you feel supported? Respected? Are you challenged? Are you developing in a manner that is meaningful? Are the unique qualities that define the positive foundation of you, a part of that work life? Or like our son, are you faced with poor job-person fit?

These may sound like unusual questions. But, they shouldn’t be.

When I discuss negative work experiences with clients, expressions of feeling “drained, “lost” or “frustrated” are mentioned. When we are fighting for the elements that uniquely define who we are, we suffer. Our employers may miss out on our strengths. Our customers do not benefit from our talents.

We wage a talent war that no one can win.

This realization drove me to take a step back.

What might help explain why this dynamic — that when ignored can become utterly devastating. I recalled humanistic psychology. A reaction to behaviorism and the tenets of psychoanalytic thought (made known by Freud), humanistic theory offers an interesting framework as we approach the job-person fit. Humanism explains that we posses a drive toward becoming self-actualized. In other words, a drive to maximize our creative potential. (This line of thought came to the forefront through the work of psychologists Carl Rogers and Abraham Maslow.)

Its direction and tenor could easily apply to work life:

  • When considering people — the whole is greater than than the sum of the parts.
  • There is a drive to achieve congruence between our “real self” and the “ideal self”.
  • Some measure of unconditional positive regard is necessary to fully develop as an individual.
  • An individual is greatly influenced by his/her environment. Social interaction is key to development.
  • We are fully aware and have the ability to make a conscious choice. Our past experienced help drive future behavior.
  • Human beings are uniquely capable of intentional thought and goal directed behaviors.

I wonder how we can build this respect for individuals into every organization. How might current trends in HR support this effort?

I know there are many of us fighting for this. Is one of them you?

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